The federal government is taking a hands-off approach to health care. And according to some veteran observers, we should be concerned.

A decade ago, things appeared to be headed in the opposite direction.In 2004, then-Prime Minister Paul Martin and the first ministers of Canada’s provinces and territories came together to sign a 10-year health accord. The agreement boosted federal health funding annually while setting a series of guidelines for improving and expanding health care coverage and delivery across the country. At the time, it promised “transformative change” in Canadian health care, rising to meet many of the growing challenges in health costs and delivery.

That agreement, however, has now run its course. In March of this year, the accord quietly expired – with no comparable federal agreements to take its place. And while the Harper government handed down a 10-year funding formula as its replacement, the message was clear: other than setting aside money for the provinces, Ottawa would not be taking an active role in coordinating health care policy.

Dr. Alex Himelfarb, a former clerk of the Privy Council for three prime ministers, says Canadians should pay close attention to these changes, the implications of which are wide-ranging. The lack of a federal leadership role, he warns, may have serious consequences for the future of Canadian health care.

The most immediate concern, he says, is about funding. While the previous agreement included a 6 per cent annual increase in federal health funding, the new one discontinues it after 2017. Increases after that will be tied to GDP or a minimum of 3 per cent.

Highlights of the 2004 Health Accord:

The 2004 agreement between the federal government and the first ministers, which expired on March 31, 2014, called on numerous improvements and standards to be set nationally, including:

Reducing wait times and improving access to care

Increasing the supply of health care professionals across the country, whether doctors, nurses, pharmacists and technologists, and addressing shortages where they exist

Improving access to home and community care services

Establishing a best practices network to share information and develop and implement electronic health records

“The formula for transferring the money has changed to a strictly per-capita basis with no need component,” he says. “This means that some provinces will be getting pretty much no increase – especially provinces that are losing population.”

Aside from money, Himelfarb suggests a greater opportunity was lost here: Ottawa has effectively declined to take a leadership role in coordinating policy across the country. In crafting the new arrangement, he says, “There was no attempt to set minimum standards, shared objectives or shared principles.”

Was the 2004 accord a ‘costly failure?’

The outgoing accord was not without its critics, of course. According to the Globe and Mail’s Jeffrey Simpson, it was a costly failure, pumping billions of dollars into health care budgets while failing to meet most of its objectives – which included, among other things, reducing wait times, improving access to family physicians and cutting the amount of visits to emergency rooms and after-hours clinics.

“The political assertion that heaps of additional money, properly targeted, would ‘buy change’ was wrong,” wrote Simpson in a column that followed the accord’s expiry. “More change is happening now because people in the system are trying to change it, rather than doing the same things for more money.”

Himelfarb acknowledges the accord’s failures, but stresses that it was successful in other areas as well.

“It put doctors where they were needed,” he says. “It put some equipment in place that was needed. It did some very concrete things that were urgent given years of cutting that had preceded it. And it did get wait times on the agenda and made some improvements in some very specific areas.

“But,” he concedes, “It was not the holistic plan that it was set out [to be].”

According to Michael McBane, Executive Director of the Canadian Health Coalition, at least some of the accord’s failures can be tied to a lack of interest at the federal level that became apparent as soon as the Harper Conservatives took office in 2006. One of the first things to go, he says, was a planned national pharmaceuticals strategy – a key component of the 2004 accord.

“[The national pharmaceuticals strategy] was an ambitious 11-point plan,” says McBane. “All the first ministers signed onto it and instructed their ministers of health to implement it. But the minute there was a change in federal government, the new government walked away from the strategy.”

In doing so, McBane suggests, Ottawa turned away from an opportunity not only to play a leadership role in directing policy, but a chance to save billions of dollars as well. Some key elements of the strategy were efforts to bring down costs, whether by improving access to generic medicine or considering a federal government role as a bulk purchaser of drugs.

“We’re paying maybe 30 per cent more than the international average for our prescription drugs, mostly because we’re not bargaining the price,” he says. “We’re paying whatever the companies are asking. So it’s a bit rich for the current federal government to have walked away from the strategy to deal with pharmaceuticals, and then tell the provinces to get their health care costs under control.”

A role for the federal government

The federal government and its supporters, for their part, would argue that they are taking a strictly constitutional approach to health policy. Health care, after all, is managed provincially, while the federal government kicks in a share of the funding. But Himelfarb argues this is an incomplete view of the federal role.

“Section 36(1) [of the Constitution] says the federal government has the responsibility to ensure equal access to essential services of reasonably comparable quality,” he says. “And we’ve kind of decided as a country that health care is one of them.”

Without a more active federal role, there’s a risk of creating greater inequities and shortfalls between the various provincial and territorial systems. It’s something that Wendell Potter, an American health care observer and former VP of Communications for health insurance provider Cigna, finds all too familiar. He points to the broad disparities in the delivery of Medicaid in the United States.

Photo: Michael McBainWendell Potter, left, and Alex Himelfarb.

“[Medicaid] is largely administered by the states, with some money from the federal government,” he says, “but the states have wide latitude to run those programs, and the eligibility varies very widely. In some states, you almost have to be destitute and men never usually have eligibility.

“It’s not a very equitable system at all. And that’s because the federal government has ceded a lot of the power and authority to the states.”

Potter is cautious not to suggest that Canada would ever wind up with U.S.-style healthcare. But he is concerned that in the absence of federal leadership, Canadians may see more private interests creep in to fill the void. And if that happens, he warns, costs are likely to go up rather than down. The U.S., he reminds us, has the most expensive health-care system in the world, largely due to the proliferation of private health care that has arisen in the absence of strong federal oversight.

And to the credit of some provincial governments, there has been considerable innovation. McBane cites Manitoba’s exemplary work in regulating long-term care delivery, while Himelfarb acknowledges the Ontario government’s efforts to bring drug costs down. But these are provincial solutions. They’re not being shared with other jurisdictions.

Without a federal role in ensuring equal standards of care across the country, there’s no real way to coordinate these efforts. And as the new funding formula takes effect after 2017, it may become harder to do so as inequalities rise between the various provincial and territorial systems. Consequently, Himelfarb warns, we may be facing two distinct possibilities for the future of Canadian health care.

“We have the choice of a strong system of health care that assures universal access to high-quality health care wherever you live, whatever you earn, wherever you move, or 13 systems in decline with huge disparities.”

Raising public awareness

McBane, Himelfarb and Potter have been on a cross-country tour together, talking about these issues and promoting discussion about the future of Canadian health care. They’ve found, however, that there’s not much awareness among Canadians about the changes that have taken place. At a recent talk at a Brampton seniors’ centre, McBane asked people whether they thought there was a federal role in health care. Most in attendance thought so.

Himelfarb recalls the low-key response to then-Finance Minister Jim Flaherty’s announcement of the new formula in December 2011. Many of the provinces, he says, gave a muted response because either they were happy the federal government was stepping back, or because they were simply relieved that the news wasn’t as bad as they had expected.

As for the general public? “There was really no reason for the public to be plugged in because the coverage was very quiet. I don’t think there’s a great awareness to how this is moving.”

The challenge now is to explain the changes and how they will affect us, to understand the risks we face. And, McBane says, for people to speak up about it.

“Canadians, regardless of the party they vote for, believe there is actually a central role for the federal government in health care. So people need to get politically active, make sure their voices are heard. Push back on all the parties.”